2012-2013 Financial statements

Statement of management responsibility including internal control over financial reporting

Responsibility for the integrity and objectivity of the accompanying financial statements for the year ended March 31, 2013, and all information contained in these statements rests with the management of the Immigration and Refugee Board of Canada (IRB). These financial statements have been prepared by management using the Government's accounting policies, which are based on Canadian public sector accounting standards.

Management is responsible for the integrity and objectivity of the information in these financial statements. Some of the information in the financial statements is based on management's best estimates and judgment, and gives due consideration to materiality. To fulfill its accounting and reporting responsibilities, management maintains a set of accounts that provides a centralized record of the IRB's financial transactions. Financial information submitted in the preparation of the Public Accounts of Canada, and included in the IRB's Departmental Performance Report, is consistent with these financial statements.

Management is also responsible for maintaining an effective system of internal control over financial reporting (ICFR) designed to provide reasonable assurance that financial information is reliable, that assets are safeguarded and that transactions are properly authorized and recorded in accordance with the Financial Administration Act and other applicable legislation, regulations, authorities and policies.

Management seeks to ensure the objectivity and integrity of data in its financial statements through careful selection, training, and development of qualified staff; through organizational arrangements that provide appropriate divisions of responsibility; through communication programs aimed at ensuring that regulations, policies, standards, and managerial authorities are understood throughout the IRB and through conducting an annual risk-based assessment of the effectiveness of the system of ICFR.

The system of ICFR is designed to mitigate risks to a reasonable level based on an ongoing process to identify key risks, to assess effectiveness of associated key controls, and to make any necessary adjustments.

A risk-based assessment of the system of ICFR for the year ended March 31, 2013 was completed in accordance with the Treasury Board Policy on Internal Control and the results and action plans are summarized in the annex.

The Chairperson's Management Board (CMB) is the senior management body responsible for setting organizational priorities and objectives and providing overall direction to the IRB. The CMB oversees major initiatives that cut across the organization to ensure a comprehensive and integrated approach.

The Chief Financial Officer is a full member of the CMB.

In accordance with the Treasury Board Secretariat's Policy on Internal Audit, the IRB established a Departmental Audit Committee which includes external members. Its role is to provide the IRB's Chairperson with added assurance and advice on risk management, control and governance processes.

The financial statements of the Immigration and Refugee Board of Canada have not been audited.

Ottawa, Canada
October 2013

Contingent liabilities (note 8)
The accompanying notes form an integral part of these financial statements.

Ottawa, Canada
October 2013

Segmented information (note 10)
The accompanying notes form an integral part of these financial statements.

The accompanying notes form an integral part of these financial statements.

The accompanying notes form an integral part of these financial statements.

Immigration and Refugee Board of Canada
Notes to the Financial Statements (Unaudited)
For the Year Ended March 31

1. Authority and objectives

The Immigration and Refugee Board of Canada (IRB) is an independent administrative tribunal that was created on January 1, 1989, by an amendment to the Immigration Act. In 2002, the Immigration Actwas replaced by the Immigration and Refugee Protection Act (IRPA), which was amended by the Balanced Refugee Reform Act (BRRA) and by the Protecting Canada's Immigration System Act (PCISA) in 2012. IRB divisions derived their mandates from these acts during the 2012–13 reporting period.

The Board strategic outcome is to resolve immigration and refugee cases efficiently, fairly and in accordance with the law.

Five program activities support this strategic outcome:

• Refugee Protection
  Renders quality decisions and otherwise resolves cases in a timely manner regarding:
  • Refugee protection claims made by persons in Canada;
  • Pre-removal risk assessments (PRRA) of persons subject to a removal order.^{Note 1}
• Refugee Appeal
  Renders quality decisions and otherwise resolves cases in a timely manner regarding:
  • Appeals from Refugee Protection Division decisions concerning refugee protection claims.
• Admissibility Hearings and Detention Reviews
  Renders quality decisions and otherwise resolves cases in a timely manner regarding:
  • Admissibility of foreign nationals or permanent residents who are alleged to be inadmissible to Canada pursuant to the Immigration and Refugee Protection Act (IRPA);
  • Detention reviews for foreign nationals or permanent residents who are detained under the IRPA.
• Immigration Appeal
  Renders quality decisions and otherwise resolves cases in a timely manner regarding:
  • family sponsorship applications refused by the Department of Citizenship and Immigration;
  • Certain removal orders made against permanent residents, Convention refugees and other protected persons and holders of permanent resident visas;
  • Permanent residents outside of Canada who have been found not to have fulfilled their residency obligation;
  • Appeals by the Minister of Public Safety against a decision of the Immigration Division on admissibility.
• Internal Services
  The IRB administers internal services in support of program activities and other corporate obligations. Internal services include management and oversight services, legal services, human resources management services, financial management services, information management services, information technology services, real property services, material services, acquisition services, corporate security, and travel and other administrative services.

2. Summary of significant accounting policies

These financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

1. Parliamentary authorities

   The IRB is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the IRB do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Statement of Operations and the Departmental Net Financial Position and in the Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. note 3 provides a reconciliation between the bases of reporting. The planned results amounts in the Statement of Operations and Departmental Net Financial Position are the amounts reported in the future-oriented financial statements included in the 2012-13 Report on Plans and Priorities.

2. Net Cash Provided by Government

   The IRB operates within the Consolidated Revenue Fund (CRF), which is administered by the Receiver General for Canada. All cash received by the IRB is deposited to the CRF and all cash disbursements made by the IRB are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the Government.

3. Due from the CRF

   Amounts due from the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash that the IRB is entitled to draw from the CRF without further appropriations to discharge its liabilities.

4. Revenue

   Other revenues are accounted for in the period in which the underlying transaction or event that gave rise to the revenue takes place. The IRB does not charge for its services and its only revenues stem from gains on disposals of crown assets, Access to Information and Privacy fees and interest on overdue accounts receivable.

   Revenues that are non-respendable are not available to discharge the Department's liabilities. While the Deputy Head is expected to maintain accounting control, he or she has no authority regarding the disposition of non-respendable revenues. As a result, non-respendable revenues are considered to be earned on behalf of the Government of Canada and are therefore presented in reduction of the entity's gross revenues.

5. Expenses

   Expenses are recorded on the accrual basis:

   • Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.
   • Services provided without charge by other government departments for accommodation and employer contributions to the health and dental insurance plans are recorded as operating expenses at their estimated cost.
6. Employee future benefits
   1. Pension benefits: Eligible employees participate in the Public Service Pension Plan, a multiemployer pension plan administered by the Government. The IRB's contributions to the Plan are charged to expenses in the year incurred and represent the total obligation of the Board to the Plan. The IRB's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
   2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.
7. Accounts receivable

   Accounts receivable are stated at the lower of cost and net recoverable value. A valuation allowance is recorded for accounts receivable where recovery is considered uncertain.

8. Contingent liabilities

   Contingent liabilities are potential liabilities which may become actual liabilities when one or more future events occur or fail to occur. To the extent that the future event is likely to occur or fail to occur, and a reasonable estimate of the loss can be made, an estimated liability is accrued and an expense recorded. If the likelihood is not determinable or an amount cannot be reasonably estimated, the contingency is disclosed in the notes to the financial statements.

9. Tangible capital assets

   All tangible capital assets and leasehold improvements having an initial cost of $10,000 or more are recorded at their acquisition cost. The Board does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value.

   Amortization of tangible capital assets is done on a straight-line basis over the estimated useful life of the asset as follows:

   Amortization of tangible capital assets

   Asset class	Amortization Period
   Informatics hardware	4 years
   Informatics software	5 years
   Machinery and Equipment	10 years
   Leasehold improvements	Lesser of the remaining term of the lease or useful life of the improvement

   Assets under construction are recorded in the applicable capital asset class in the year that they become available for use and are not amortized until they become available for use.

10. Measurement uncertainty

    The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are contingent liabilities, the liability for employee severance benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

3. Parliamentary authorities

The IRB receives its funding through annual Parliamentary authorities. Items recognized in the Statement of Operations and Departmental Net Position and the Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the IRB has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

4. Accounts payable and accrued liabilities

The following table presents details of the IRB's accounts payables and accrued liabilities (in thousands of dollars):

In Canada’s Economic Action Plan 2012, the Government announced savings measures to be implemented by departments over the next three years starting in 2012-2013. As a result, the Board has recorded at March 31, 2013, an obligation for termination benefits for an amount of $812 ($524 in 2011-2012) as part of accrued liabilities to reflect the estimated workforce adjustments costs.

5. Employee future benefits

1. Pension benefits

   The IRB's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government. Pension benefits accrue up to a maximum period of 35 years at a rate of 2 percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Québec Pension Plans benefits and they are indexed to inflation.

   Both the employees and the IRB contribute to the cost of the Plan. The 2012-2013 expense amounts to $9.9M ($10.4M in 2011-2012), which represents approximately 1.7 times (1.8 times in 2011-2012) the contributions by employees.

   The IRB's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

2. Severance benefits

   The IRB provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities.

   As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date or collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation. Information about the severance benefits, measured as at March 31, is as follows (in thousands of dollar):

6. Accounts receivable and advances

The following table presents details of the IRB's accounts receivable and advances balances (in thousands of dollars):

7. Tangible capital assets

(1) Adjustments include assets under construction of $9,889 thousands of dollar that were transferred to the other categories upon completion of the assets.

8. Contingent liabilities

Contingent liabilities arise in the normal course of operations and their ultimate disposition is unknown.

1. Claims and litigation

   Claims have been made against the IRB in the normal course of operations. These claims include items with pleading amounts and other for which no amount is specified. While the total amount claimed in these actions is significant, their outcomes are not determinable.

9. Related party transactions

The IRB is related as a result of common ownership to all government departments, agencies, and Crown corporations. The IRB enters into transactions with these entities in the normal course of business and on normal trade terms. During the year, the IRB received common services which were obtained without charge from other government departments as disclosed below.

1. Common services provided without charge by other government departments

   During the year, the IRB received services without charge from certain common service organizations, related to accommodation and the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the IRB's Statement of Operations and Departmental Net Financial Position as follows (in thousands of dollars):

   Common services provided without charge by other government departments

   	2013	2012
   Accommodation	16,516	16,461
   Employer's contribution to the health and dental insurance plans	7,805	8,027
   Total	24,321	24,488

   The Government has centralized some of its administrative activities for efficiency, cost-effectiveness purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The costs of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada and audit services provided by the Office of the Auditor General are not included in the IRB's Statement of Operations and Departmental Net Financial Position.

2. Other transactions with related parties (in thousands of dollars)

   Other transactions with related parties

   	2013	2012
   Expenses - Other Government departments and agencies	23,365	24,481

10. Segmented information

Presentation by segment is based on the IRB's program alignment architecture. The presentation by segment is based on the same accounting policies as described in the Summary of significant accounting policies in note 2. The following table presents the expenses incurred and revenues generated for the main program activities, by major object of expenses and by major type of revenues. The segment results for the period are as follows (in thousands of dollars):

Annex to the statement of management responsibility including internal control over financial reporting (unaudited)
Immigration and Refugee Board of Canada
Fiscal Year 2012-2013